F1 and LG partnership

LG will become the official Consumer Electronics, Mobile Phone and Data Processor of Formula 1, beginning in January 2009. As the Official Data Processor of F1 LG will be identified and credited on the official live timing service at events and in the associated timing and data TV graphics. The company will also enjoy a comprehensive package of premium marketing rights worldwide in association with the F1 brand.

GrandPrix.com compares the global partnerships to raise revenue in F1 to similar partnerships by International Olympic Committee (IOC) and FIFA.

For the period 2005-2008 the Olympic partnership programme generated a total of $866m, which was around 34% of the IOC’s total revenue.

The FIFA budget for the period 2007-2010 is aiming for revenues of $3.2bn and according to the latest figures for 2007 the sale of marketing rights brought in $223m

The big difference between Formula One and the IOC and FIFA programmes is that the Olympics and the World Cup do not generate income to make the shareholders wealthier, but rather reinvest a major amount back into the sport.

The problem is easily solved but that would need the shareholders in the Formula One group to be willing to take lower financial returns and there is no sign of that happening as the major shareholder CVC Capital Partners seems to be interested in the sport only as a means of making money and has left the running of the business almost entirely in the hands of Bernie Ecclestone. The cost of an international driver scholarship scheme for promising youngsters or the funding of karting facilities in regions where none exist would not take a big chunk out of the profits and would help to solve some of the perceptions that exist.